Going Concern

Career Center

Job of the Day: PwC Needs a Tax Manager

GoingConcern
May 18, 2010

PricewaterhouseCoopers is looking for an experienced tax professional to join its Private Company Services (“PCS”) team. PCS helps private companies and their owners with tax planning an compliance decisions at all stages of the business.

The position requires five to seven years experience and is located in Chicago.

Company: PricewaterhouseCoopers

Title: Tax Manager

Location: Chicago, IL

Description: The Private Company Services (PCS) team is a dedicated group of professionals who focus on the audit, tax compliance and planning, and business advisory needs of public interest entities, and private companies and their owners. By helping private companies make strategic decisions throughout the business lifecycle, our PCS practice is designed to help clients improve cash flow and increase owners’ wealth accumulation. This includes access to capital markets, initial public offerings and assistance with growth into international markets. The team’s clients primarily reside in private equity portfolio companies and the manufacturing, retail, wholesale and distribution, professional services and construction industries.

Qualifications/Skills: 5 – 7 years of tax consulting or compliance experience is required.

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

Small Business

Small Businesses Lead on Long-term Job Growth

GoingConcern
May 18, 2010

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

If you harbored any doubts about the importance of small businesses to job growth, then you should consider the results of new research looking at payroll data over the past ten years. The clear conclusion is that the lion’s share of employment growth over the long term has happened at establishments employing fewer than 50 people.

But the implications for our current economic situation are disturbing.

The research, from Case Western Reserve’s Scott Shane, looked at data collected from Automated Data Processing’s monthly employment numbers from 2000 to 2010. The numbers are broken down into three categories: establishments with 1-49, 50-499, and more than 499 employees. By establishment, ADP means “a single physical location where business transactions take place and for which payroll and employment records are kept.”

According to Shane’s analysis, the most job loss has occurred at the bigger establishments. For example, in March 2010, the biggest folks employed 84.3 percent of the people who worked for them in December 2000. As for establishments with 50 to 499 workers, they employed 93.6 percent of those who worked for them over that same time period.

But, for the smallest establishments, the story is startlingly different. They now employ 103.5 percent of the people they employed in December 2000.

Then, there’s a study from the Ewing Marion Kauffman Foundation I wrote about recently. It showed that high-growth companies that are three -to- five years old account for about 10 percent of new jobs in any given year, although they make up less than one percent of all businesses.

But, if small establishments and so-called gazelle firms are so important to job growth, then the latest data from the National Federation of Independent Business, reported on by my colleague Stephen Taub, is especially sobering. The findings showed continued decreases in hiring and flat growth in capital expenditures.

It all has urgent implications for government policy. Given the importance of fast-growing young firms, in particular, to employment creation, the wisest policies would be those that support these promising, three-to-five year old businesses. Something has to be done to get our engine of employment creation back on track.

BDO Not Thrilled with the Legal Advice It Got Re: Tax Shelters

Caleb Newquist
May 18, 2010

BDO’s Tax Solutions Group was going gangbusters back in the late 90s and early aughts. Unfortunately, the party more or less ended in December 2000 when the IRS served notice to the firm that some of the products were not ingenious tax planning strategies but rather illegal tax shelters. The DOJ launched an enforcement action in 2002 and just last year BDO partners started pleading guilty to tax evasion, conspiracy and some other fun charges.

BDO isn’t crazy about shouldering all the shame and embarrassment so it has decided to sue the law firm Morgan Lewis for “professional negligence, breach of contract, breach of fiduciary duty, fraud and constructive fraud.” BDO alleges that ML’s breach amounted to “disastrous results” which is likely referring to the tax shelter shitshow. They just want their $9 million back that they paid in fees and call it a day (they’re saving up!).

Morgan Lewis finds this all very amusing, stating that they advised BDO only on minor issues. ML is represented by Gibson, Dunn, & Crutcher led by James Fogelman, who made his client’s position very clear:

Morgan Lewis called the lawsuit a “sham” and contended it only advised [BDO Partners] on a few minor questions — none of which involved the questionable tax products. “There was nothing that Morgan Lewis knew about to warn BDO concerning BDO’s own conduct. … There was nothing more BDO needed to know,” Fogelman wrote.

The only time Morgan Lewis opined on a tax product, the firm contends, was in February 2000, when BDO asked it to weigh in on a tax shelter dubbed the Sentinal Transaction. Morgan Lewis responded that the tax shelter was “unlikely” to expose BDO to criminal convictions. In its motion to dismiss, the firm said, “[I]t does not appear that anybody has ever been convicted of any federal crime based on the Sentinal Transaction.”

And Morgan Lewis doesn’t simply want to be vindicated in this matter, they want to be right AND they they would like BDO and DLA Piper (BDO’s counsel) to have sanctions slapped on their asses for lying through their teeth in their complaint. ML contends that they presented evidence disproving the allegations but BDO and DLA must have decided that a bitter fight would be more fun.

And it is.

BDO Seidman Seeks $9 Million in Fees Back From Morgan Lewis [The National Law Journal via Law.com]

How to Choose a CPA Exam Review Course

Adrienne Gonzalez
May 18, 2010

As many of you who have been reading Going Concern for some time already know, I used to be in CPA Review. I ditched that gig months ago to pursue my dream of writing full-time (so far so good) and can finally write a completely unbiased post on choosing a review course. I won’t name names here just for the sake of equal opportunity but let’s talk about how to pick a review coursntly, whether or not you actually need one.

First and foremost, if you are broke, you need to know that review courses are expensive. Like new car expensive. Ok, maybe like used Ford Focus expensive, either way, if you’re fresh out of school or still looking for work, you probably don’t have $2,000 lying around. It’s fine, you can get by on cheap textbooks but you’re going to have to bust your ass a tad harder than the guy who got his flashcards and full review paid for by the firm.

Keep in mind: the CPA exam is an investment of not just money but time. If you put $2,000 into it but still don’t study, you’re going to fail miserably. Unless you pay some brainiac $2,000 to take the exam for you but that would be illegal.

If you’ve got the cash for a full review, the first thing you’ll want to do is your homework. No, not practice MCQ, we’re talking research. A simple Google search will give you plenty of options (hell, there are less than a dozen CPA review providers so it’s not like you have to slog through pages upon pages of results). Remember: every candidate is different and what works for the stock photo chick on the company’s website may or may not work for you. Before you start looking for a course, take a personal inventory of your own needs and think up some questions to ask. Try these if you’re really stumped:

• Is there an instructor or teacher available if I have questions about homework or content? And if so, how long should I expect to wait for a response?

• How long from purchase do I have to access the material? Will it expire? Can I renew after that period and if so, are there any limitations on when?

• Are there any discounts available?

• Am I limited to one format or can I have the flexibility of combining online/live courses?

• What is the policy for students who fail a part? Is there a repeat or discounted option?

• Will I have access to updates as they are released and is there a cost and/or time limitation for this?

Those are a start. Most of this information is available on CPA review courses’ websites but sometimes it helps to get a real person on the phone and ask. You can quickly tell what sort of operation you are dealing with by the way the company’s phone staff handle your questions. The exam is a commitment and so is your choice of review course so be sure you are comfortable before you commit.

If you have already committed to a course that isn’t working for you, call around and ask if there are discounts available for students who have taken other courses. Most CPA review companies offer this.

Keep in mind that review courses – like all businesses – are still interested in making money above all else. Some will push full programs with all the bells and whistles while others rely on materials that look like they were made at Kinkos; at the end of the day, it’s not how shiny your review book is but how effective the instruction style is in teaching you the concepts that will help you pass.

And you will, as long as you put in the effort.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here and all posts on the CPA Exam here.

Accounting News Roundup: Bidz.com’s Financial Reporting Could Have Some Issues; Tax Planning Stays One Step Ahead Financial Reform; Accountant Denied Bail in Terror Case | 05.18.10

Caleb Newquist
May 18, 2010

Can We Trust Bidz.com’s Financial Reporting? [White Collar Fraud]
We won’t tell you what to think but you should know that Bidz reported “material weaknesses in internal control over financial reporting” specifically those controls over “management oversight and anti-fraud controls specifically in processing of financial transactions, vendor review and payment processing,” in its most recent 10-K and 10-Q As an investor in Bidz, this should make you queasy. Unless, of course, you’re not concerned with such matters.

Sam Antar probably doesn’t care either way but he does put something out there, “Bidz.com cannot effectively prevent anyone from robbing the company blind and cannot prevent material errors in paying its vendors. Yet, the company wants you to believe that its financial reports contain no material errors and comply with GAAP.” But if you’re not sketched out by such things, then by all means, invest away.

But wait, in case that doesn’t earn your skepticism, the SEC began its investigation last year after Sam pointed out inventory irregularities at the company. Shortly thereafter, the Commission expanded its investigation into “the Company’s co-op marketing contributions and minimum gross profit guarantees.” If that wasn’t enough, the company’s auditors, Stonefield Josephson, were cited by the PCAOB for “significant deficiencies in a smaller sample of one of four audits reviewed.” So, again, if you can get over all that, this is probably a fine company to have your money invested in.

Bobbing as the Taxman Weaves [DealBook]
As Congress continues to dispel its wisdom on financial reform, it’s has become the natural order of things for any regulation to be circumvented prior to the passage of any bill.

In the case of carried interest, an incentive paid to hedge and private equity fund managers out of gains on the funds’ investments, Congress would like to tax these incentives at the ordinary rate (soon to be 39.6%). Currently, carried interest is taxed at the capital gains rate of 15%. DealBook reports that, despite threats by House to penalize those who use creative tax strategies that later fail, the maneuvering has not slowed:

The House of Representatives, aware that some titans of finance were already charting a course around any proposed change to their tax status, included a special provision in its version of the new legislation levying a 40 percent penalty for executives who invoked a loophole to cut their tax bill but were later ruled to have been wrong in doing so.

Still, that hasn’t stopped them from trying.

One of the latest machinations being whispered about in the industry goes like this: Private equity executives would sell their “carried interest” to a third party and then use the cash they received to invest directly in the deal so that any increase in value would be a capital gain.

It’s not clear whether this will work or not but it sure seems like fun.

Accountant held without bail in NYC in terror case [AP]
Sabirhan Hasanoff, a former PwC Senior Manager, was denied bail yesterday for his role in an alleged conspiracy that supported al-Qaida. He pleaded not guilty to the charges against him.

Quote of the Day

We’re Talking About Congress, Right?

Caleb Newquist
May 18, 2010

“I continue to count on good sense and wisdom to trump short-term political advantage.”

~ Ben Bernanke, who may be right out of his mind.

Allegedly, a Few Ernst & Young Partners Just So Happened to Join PwC

Caleb Newquist
May 18, 2010

Never having the pleasure of attending a partner-only soiree, we don’t have much knowledge about the haps at these events but we do imagine catering slightly better than what you would find at an in-house training but served by oompa loompas. And an open bar, natch.

Likewise, we’ve never heard about Big 4 partner mixers where, for example, an PwC partner might chat up a E&Y partner talking IFRS, where they fall on the staff’s hottie list and “oh by the way, waddaya say you join our firm?” To save face, we imagine said E&Yer responding with a “No, I will not make out with you” retort followed by open-faced slaps and ripped Jos. A. Bank until the beefy security pulled the two apart (at which point the P. Dubs partner gives his target the “call me” sign).

We bring all this up because the Times Online reports that there has been a fair amount of defection from Ernst & Young to PricewaterhouseCoopers in the Middle East (no sissies allowed). PwC’s Middle East practice was purchased by the UK firm last year and now the Times reports that 20 E&Y partners have been poached by P. Dubs:

According to people familiar with the situation, the defections — amounting to almost a fifth of Ernst & Young’s partners in the Middle East — were in several locations across the region. Most were from Ernst & Young’s consulting business, The moves began last summer but were kept secret because of a settlement between the two firms. PwC agreed that it would not approach any more Ernst & Young staff in return for Ernst & Young agreeing not to take legal action to block the departures.

Neither firm would comment for the Times article except to boast about their numbers in the region, “PwC confirmed that it had recruited 25 new partners and 400 staff in its Middle East offices in the past 12 months,” and “A spokesman for Ernst & Young said that it remained ‘easily the largest’ of the Big Four in the Middle East,” so both firms’ communication departments seem to be operating as normal.

Whether such (alleged) deliberate defections have happened in the States, we don’t know but we hear it is quite the spectacle (marched out by the OMP the second the news got dropped) when one partner notifies his/her intent to leave for a competitor, so all out war could reasonably be expected.

PwC raids rival before Middle East step [Times Online]

Are You Saying That An IRS Collection Agent Might Not Be Completely Honest with a Taxpayer?

Caleb Newquist
May 18, 2010

You know, you’d think with all the challenges the IRS faces – airplanes, llelo/baking powder scares, virtual Tea Partiers – one would think that when on a collection call, agents would apply a spoonful of sugar to help the financial rectal exam go down.

Sadly, we’re informed over at Tax Lawyer’s Blog that it’s typically much more devious than that:

Often, when a taxpayer speaks to a low-level IRS official about a tax issue the official tells him one or more of the following:

• You must pay the debt or you will be criminally prosecuted
• If you don’t pay the debt in full within so many days, your assets will be seized
• It’s a waste of money to hire an attorney

As noted Peter Pappas notes, these three points are, in a word, gobbledygook.

Despite how much you might not want to admit it, attorneys are always useful in legal situations, especially complex ones. You might be able to get out of a traffic ticket on your own but probably not a tax case. An expert is needed (whether it’s a lawyer, CPA or EA). Further, as the post notes, these collectors are not the tax sages that they might present themselves to be, “[T]hese IRS officials are wholly unqualified to give legal advice to taxpayers. They aren’t lawyers, CPAs, or IRS Enrolled Agents and in the great majority of cases lack a substantial background and education in the intricacies of federal tax law.”

And there is the small matter of the agent acting in the best interest of the Federal Government so the modern day Matthew isn’t exactly in the best position to be giving the taxpayer advice.

IRS Collection Officials Intentionally Mislead Taxpayers [Tax Lawyer’s Blog via Tax Update Blog]

Lots of Accountants Want a New Job Even if It Means More Stress

Daniel Braddock
May 17, 2010

Good afternoon, and welcome back to the grind. I don’t know how your respective Monday started off, but mine began as it usually does; a large black coffee from the corner bodega, a longer-and-slower-than-it-has-to-be commute, and a daily update e-newsletter from FINS. I typically skim the link-heavy message for relevant stories or articles of interest, but today I found myself killing an extra few minutes browsing their website’s articles. I was caught off-guard by the title of one of their articles, “Accountants: ‘Push Me, Please!” Accountants wanting more work and stress? No chance in hell.

Actually, that seems to be just the case.

The short piece tosses around a few statistics, one that stands out when reading the fine print (my emphasis), “The majority of accounting and finance professionals surveyed (79%) say they prefer work with the opportunity for growth and advancement, even if it means more stress.”

That’s right. Even though stress in the workplace can lead to heart disease, strained personal relationships, and general irritableness, nearly 80 percent of accounting professionals would leave their current working environment for a new one. Think about that; hell, look around the room. Eenie, meenie, miney, moe. They all hate their jobs.

Not to continue playing Daniel Downer over here (it is MOANday after all), but a report out of the UK cites a report that says more than one in four working adults have their weekends ruined by the pending workweek ahead:

In a study to be launched tomorrow by the mental health charity Mind, employees were questioned about their levels of anxiety and more than 26% said they felt dread and apprehension the day before they were due to go back to work after a day or weekend off…Other findings include effects on people’s sleep patterns, high rates of illness and reports of extensive low morale.

(The bold portion sounds a lot like busy season.)

It’s no secret that everyone lives with stress; nor am I naïve in thinking that we all deserve well paying, stress free jobs. But how one manages day-to-day stress is just as important as planning for and working towards long term career aspirations. I encourage you to take the initiative to learn how strike a better (and more calming) balance in your daily routine. WebMD has a comprehensive Stress Management Center that covers topics ranging from quick fixes to diet changes to managing job stress.

Or you could just keep working for The Man and leave it up to your employers to catch on. They’re probably reviewing PwC’s book of HR strategerie as we speak. If you’re working at PDubs, well lucky you – consider your career is in good hands.

Don’t stress.

KPMG

KPMG’s Leadership Is Not Determined By Rock-Paper-Scissors

Caleb Newquist
May 17, 2010

KPMG Leadership has been on a communication rampage this month, answering questions from inquiring Klynveldians about the firm’s performance and compensation.

This time around, thd by COO Henry Keizer) discuss their roles in the firm and the election process because, presumably, it might make for a good ice breaker at your upcoming Memorial Day BBQ.

Inquisitor 1: Congratulations on your new roles – Chairman and Deputy Chairman. What can you tell us about the process that you go through in having that occur? And what’s the differentiation between your two roles?

Flynn: The board has a responsibility to have a succession planning process in place to elect the Chairman and Deputy Chairman. That is then put to an up or down vote of the partners for ratification. Chairman and Deputy Chairman are – today – a five-year term jointly and then a three-year second term, should they so choose. The board elects them to a second term.

John and I were elected in June of 2005, for a five-year term. I was elected as Global Chairman on October 1, 2007. I came to the conclusion through the fall that I really couldn’t do both roles full time.

In recognizing that in a complex, changing world today, we really need a full-time U.S. Chairman and Deputy Chairman to take care of what has to get done here in the world that we’re in—and as well, we’ll talk more about it, but we have to evolve the global firm, a $20 billion organization – shouldn’t there be a full-time executive team that wakes up every day on how to carry out the responsibilities of a $20 billion organization?

Veihmeyer: In terms of specific responsibilities – as Chairman, I’m the CEO. Henry chairs the Management Committee and a lot of what we talked about in terms of executing effectively and making sure that we are – from an operational standpoint – a very high-performance organization, Henry will lead through his role as Chief Operating Officer.

In other words – the process at KPMG isn’t exactly the electoral college. It’s basically a fight until the (near) death and the winner gets the thumbs up/thumbs down, Gladiator style, from the Board. Then they shake hands, slap each other on the ass, etc. and get back to work.

For this past cycle it does sound like T Fly was a little burned out from the globe trotting and keeping the peace Stateside so it was natural for JVeih to step up to the big chair for the U.S. after the terms expired. A $20 billion company is nothing to sneeze at so we thought that maybe we should start taking this “global firm” thing seriously (even though we’re all independent of each other and are legally not one firm) and let somebody tackle it full time.

Inquisitor 2: How will the succession process work within the next three months?

Veihmeyer: In terms of the specific things that have to take place, obviously we have some things around the leadership team that we have to get in place. Henry comes out of his role leading our Audit practice. So we will get all that in place as we lead up to early June, what team will be in place as we go forward post-June 10th, leading the firm. Henry…

Keizer: The transition that Tim and John described sets us up in a very good position to make sure as we move through fiscal 2010, we won’t be focused internally. It will allow us not only to continue to build on the foundation that we’ve built over the past several years, but more importantly, to really stay focused on making sure when we look back on 2010, it will be a year where everyone could say we’re on our way to recovery. The things that we all want, in terms of a more vibrant business, more rewards for our people, are all beginning to come back into the picture, and that that’s what we’re all committed to, I’m sure.

We’re taking applications for Hank’s position. You have to be able to stick to talking points, send out a mass amount of emails (via admin assistant natch) and smile a lot. Oh, and you can’t gush when Phil shows up for photo ops; you’ve got to keep it cool.

Career Center

Job of the Day: Harvard Management Company Needs a Senior Accountant

GoingConcern
May 17, 2010

Harvard Management Company is looking for an experienced accountant to join their accounting and finance department.

The position is focused on the Marketable Securities Funds portfolio which is comprised of hedge fund investments. This person will be responsible for all the accounting and analysis for the portfolio.

Candidates should have a minimum of three years experience, hedge fund experience being a plus, and a CPA is preferred.

Company: Harvard Management Company, Inc.

Title: Senior Accountant – Marketable Securities Funds

Location: Boston, MA

Description: The Senior Associate will be responsible for all accounting and related accounting-specific analysis and reporting functions of the MSF portfolio as well as contributing to the accounting of the NR portfolio, as needed. This includes transaction entry, cash movement, and valuation input processes related to these portfolios as well as valuation review and analytical procedures. This also includes the reconciliation of transaction entry, accounting, and performance systems to ensure trade execution accuracy and proper recording of all transactions. The Senior Associate will work closely with other members of the external management accounting team to execute the accounting period close on a monthly basis. This process requires in-depth understanding and analysis of the MSF portfolio investments, including the documentation of significant matters on an ongoing basis. Lastly, the Senior Associate will be involved in the ongoing assessment of accounting and valuation issues related to these portfolios, including financial reporting considerations.

Responsibilities: Maintain the integrity of the portfolio accounting systems and general ledger records; Monitor proper reconciliation of transaction entry, accounting, and performance reporting systems; Contribute to financial statement and valuation analysis; Execute cash movements in coordination with custody operations personnel and ensure trades are processed accurately and timely; Analyze current industry and accounting guidance and its applicability to the MSF portfolio accounting process; Facilitate communication with external managers to provide relevant insight into the accounting and valuation process; Obtain and review fund valuation statements and assist in the analysis of these statements; Interact with and support the MSF portfolio managers regarding current investments; Assist during the annual audit, providing information as requested and maintaining audit reports throughout the year; Participate in special projects and duties as assigned ; Provide accounting-related support and reporting to HMC’s Tax department; Manage responsibilities pertaining to business continuity preparedness, documentation, Disaster Recovery site visits, etc.

Qualifications/Skills: BS Accounting, CPA preferred; Minimum 3-5 years of relevant accounting experience (hedge fund specific experience a plus); Ideal candidate will be very proficient with hedge fund L.P. investment accounting/industry issues; Knowledge and demonstrated interest of financial markets and products

See the entire description over at the GC Career Center and visit the main page for all your job search needs.

News

Just to Clear It Up: Grant Thornton Is an Accounting Firm Not a Law Firm

Caleb Newquist
May 17, 2010

We stumbled upon this letter recently that appears to indicate that there was some confusion between the Grant Thornton Atlanta office and a Judge in Florida about what kind of services GT provides.

GT Atlanta

So it appears Mr Bowles has a little bit of responsibility here since he admits, “I did not submit a written request to appear as an other qualified representative in the form specified in [rule] which would have triggered a specific determination by you about my qualifications to go forward.” The lengthy explanation that follows kinda sorta indicates that maybe, he feels like this was his bad that the mistake got made. If you disagree and would like to blame the judge, fire away.

That being said, we figured that GT had enough of a reputation as an accounting firm to be recognized as such with little or no investigation. Apparently that is not the case. We left messages with both Judge Holified and Mr Bowles to get an explanation but so far neither of them have returned our calls.

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